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Property/DIY

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Original poster

help! are we selling too cheaply? and is the market picking up??!

37 replies

vannah · 05/02/2009 21:36

because we have just been told that we are...
our flat was on last spring for 375k, by autumn we had reduced it to 340k and by xmas 320k, we have had an offer finally for 295 and accepted it as we thought prices would continue to plummet however there are tons of 'sale agreed' boards all over our road suddenly, we have had so many viewings since jan...and a 'friendly' agent (not ours) but one we had it on with before just called to say we are should be careful as the market is suddenly picking up.

I would dismiss this normally but it does coincide with whats happening ie tons viewings, prices that im looking at in our area have gone up... and we are selling our flat in a prime road at 80k less than the original price. A solicitor told me that i was lucky to have an offer yesterday, but Im now confused...
anyone?
thanks

OP posts:

popsycal · 07/02/2009 15:09

oh thanks so so much - that is really really helpful - that % thing makes sense now

WW - to answer your quesrtions

a) you need to and want to
We desperately need to and desperately want to

b) you can sell for more than you owe and
We can definitely sell for more than we owe - we owe about 55k and it was valued at around 160k last Easter

c) you are happy that if you sell for X% less than it's 'worth' (given that ANYTHING is only worth what anyone will pay for it!) then you think you can get the same discount on where you buy - so you have to drop 25% say but that doesn't matter if you also get 25% off your purchase
I think I understand that - ie the house we buy should be roughly the same % drop now that ours would be now....

d) you can afford the mortgage even if rates go up by quite a bit
We are fixed for another 2 years - the mortgage is portable in that what we owe now is at the fixed rate we got it at last Easter if we take the mortgage with us and any additional borrowing would be at the SVR which I knbow is really low at the minute but likely to go up. We would probably be looking at borrowing about 50k at the SVR. Or paying the small redemption penalty to get out of the mortgage and getting a new one for the lot (which of course we would look at very carefylly first!!!!)

Argh - it is such a scary minefield

jeanjeannie · 07/02/2009 16:18

Think you may need a crystal ball

Thing is - once the banks start lending again they will be back to the old fashioned 3.5/4 x salary and, bearing in mind there won't be many pay rises, I think the number of people able to buy at the 'old prices' will be small. Unless there are a lot of folk out there with savings (unlikely!) the prices may well be driven down by the average wage and what it can buy you.

I was in negative equitity back in the good old days (i'm that old) of the last recession and at least then the prices of property before the crash weren't over-inflated.

Pah - what do I know? People will always have to move and if the buyers are good ones then I'd say take the money. But I think in many areas prices will still fall.

sorrento · 07/02/2009 16:32

It's the deposits that are the problem, the banks will still lend you just about anything providing you have 30/40% to put down yourself, shared risk.
The days of less than 10% deposit will not happen again I don't think, in Australia in 2000 it was a 20% deposit and in all honesty the time you spent saving for it was a good time to reflect on the fact that you were not going to waste a penny of it and you were going to drive a very hard bargain.
Idiots paying the asking prices and more could do so easily because they didn't feel like they were spending their own money.

The fact is at the bottom of the pyramid is going to suffer most, hopefully most on mumsnet are somewhere in the middle.

WideWebWitch · 07/02/2009 19:49

Sorrento I agree and what that proves, to me, is that the banks are concerned that another 30-40% drop is on the cards, THAT'S why they want these sized deposits. imo

sorrento · 08/02/2009 21:09

If it's just 30% they will be delighted.
I have a large amount of cash in the bank and mine keep ringing me to suggest I pay it off my mortgage as I'm earning 0 interest on it.
I'm afraid I gave the poor chap a right earful, why the hell would I be paying off my savings off a deprecating asset.
If the losses hit 40% they'll be getting the keys posted back to them.

JandLandG · 08/02/2009 23:44

really tricky, isn't it?

we sold our previous property in jan 07...at the time, i reckoned we might have got a few thou more out of it but in the mong run, was happy to have sold and happy enough with the finances. if tha's your position, i'd take the 295.

we're in the same position now though...house valued at 315 in august.

i'd probably take 250 now tbh

probably because we can afford to, but also because this situation seems to be getting worse...unemployment breeds repossessions breeds house price falls.

unless, the govt does something drastic to stop repossessions.

just remember all the debt that people seem to be in...lots of very ig mortgage and credit card debt to service, no sign of economic green shoots

i want out of the housing market (we've moved with work anyway, our rented is expensive, but fine)...maybe pick up an absolute bargain n a couple of years...if only we've got 200k in the bank

good luck, i hope your sale goes through.

Jampot · 09/02/2009 00:26

You think a further 30-40% drop is on the cards? Why do you think this? Am starting to look around to see whats on the market as hate renting.Looking at a house that was on market for 315 now 270. What would you offer?

peachface · 09/02/2009 00:32

House on at 270k? Start the offer at around 240k. If property is empty you mnight be able to offer lower as they are liely to want to get shot of it. If you're in a strong position there's not telling what deal can be struck in this climate. Everything's negotiable and the saying that a house is only worth what someone will pay for it has never rung more true!

Jampot · 09/02/2009 00:41

a bit of cyber snooping has revealed that next door sold for 280 in 2007, nationwide house price calculator indicates it is now worth 247k as of end of Q4 2008. Also discovered its a vacant police house!!!

peachface · 09/02/2009 00:44

H'rah!
That's the way to do it - see what things sold for, what it's probably worth now as a market value (don't forget that the asking price is often more than what a mortgage company would think it's worth) and go from there.

sorrento · 09/02/2009 09:52

40% drops will be on houses that are currently occupied by people with decent equity in them that loose their jobs due to the repossessions flooding the market therefore somebody who can undercut those will.
People not seeing drop yet need to be patient, it's taken 10 years to get into this mess it's not going to be solved in 6 months.
If you've got a good deposit buying at the bottom of the market will set you up for life so do not blink first and blow it.

WideWebWitch · 09/02/2009 12:09

Jampot, I think if something goes up TWO HUNDRED PERCENT - ! - then it's entirely possible that it'll go down by 20, 30 or 40%.

So at £270 I'd

a) see what they paid for it if you can on nethouseprices

b) work out what similar sold prices are RECENTLY

c) look at propertysnake

and then offer 30% less as a first offer. So take off £80k odd, offer £190k to start with, be prepared to go up a bit if it's the house of your dreams AND you can definitely afford the mortgage.

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